Richard Bergström — Europe's Medicine Man - Pharmaceutical Executive


Richard Bergström — Europe's Medicine Man

Pharmaceutical Executive

Mandate beyond Brussels

"EFPIA is not what it was two years ago," Bergström says flatly. "But," he adds modestly, "not because I've changed it. This is the consequence of changed expectations in society. CEOs knew EFPIA would have to adapt in a changing world."

Members of the EFPIA Board
The new director-general is scrupulous to avoid comparisons with his two predecessors in the post. He is too young to remember the early days of EFPIA, when its first director-general, Nelly Baudrihaye, prided herself on stitching up deals virtually without reference to the member associations over cozy lunches in the best local restaurants with the tiny handful of EU officials who were dealing with pharmaceuticals. Even under Brian Ager, who took over in 1995, much of the focus was on developing an effective advocacy machine in Brussels. Ager turned a small lobby group into a multidisciplinary team, created separate sub-associations for vaccines and for small biotechnology firms, and moved the headquarters from the elegant Brussels suburbs into the heart of the European district, to allow closer contacts with EU officials, diplomats, and politicians.

"It's not only Brussels anymore", says Bergström. "The job has been redefined. CEOs decided they need an organization that is to deal not just with Brussels, but with member states too, to tackle the European region as a whole." He describes the adaptation as a complement to the approach many firms take to Europe, with senior managers responsible for the region. And the result is that the new boss of EFPIA spends nearly as much time tackling problems on the ground in the member countries as he does in his office in Brussels.

Since he started the job last year, he has been in an almost ceaseless round of shuttle diplomacy in the countries where the fiscal crisis has hit hardest and pharmaceutical companies have suffered most. It has often fallen to him to negotiate with national governments on ways to limit the damage, amid a tangle of—frequently divergent—pressures from CEOs, local area managers, national industry associations, and the EU authorities. Bergström's balancing act is no easy task. Local general managers and national industry associations each have their own agendas and objectives, and do not automatically welcome intrusions from the man from Brussels. Implicitly, Bergström recognizes the tensions. "Among the member associations I have no mandate, and the member associations certainly do not report to me."

What is beginning to make a difference, he says, is that the company CEOs are now more willing to stand behind EFPIA as the leading spokesman for the industry throughout the European region. "There is now an expectation that member associations will conform to policy designed to apply for the entire region of Europe—that is new," he says. "CEOs are very smart, and they have recognized how to use EFPIA to get people to move and change their views." High on the list of this mandate for region-wide advocacy is weaning national health authorities off the practice of therapeutic and cross-national reference pricing, and winning support at the European level for the concept of differential pricing.

In dealing with the immediate healthcare funding problems, the industry line is that it is ready to take some pain in working with cash strapped governments to bridge the gap. But taking the pain is not the same as taking the mickey. The negotiating message is a tough one. CEOs are not prepared to bail out bankrupt healthcare systems or to countenance persistent tolerance for unauthorized copy products from local manufacturers that deprive patients of access to true innovative medicines. Nor is the industry willing to accept emergency price reduction measures—such as in Greece—exported to the rest of Europe via international reference pricing.

One of Bergström's refrains is that Europe must not slip into the race to the bottom by seeking to acquire new medicines at the lowest possible cost. That will destroy incentives for innovation and damage research. So the talk of industry's responsibilities to Europe's patients is matched with thinly-veiled warnings that companies might be forced to disinvest systematically from markets with hostile environments.

Already, EFPIA has documented plenty of evidence of the pain in purely financial terms. In Greece, Ireland, Italy, Portugal, and Spain alone, the pharmaceutical industry claims it contributed more than €7 billion for 2010 and 2011 in price-cuts and discounts. Hospitals and regional governments in just four of those countries already owed EFPIA companies more than €15 billion in the spring of 2012—nearly half of it in Spain, and payment delays are getting longer and longer.

The figures are not just aggregates from EFPIA: In a deliberate coordinated way, companies are throwing their own data into the mix too. For example, AstraZeneca announced that austerity measures in Europe took $1 billion off its bottom line in 2011. And companies are quietly taking their products off markets where prices are forced down below what they regard as economically feasible levels.


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